Continental's Tires Group to Lean on Sustainability, EVs, Digitalization for Growth

Continental’s Tires Group to Lean on Sustainability, EVs, Digitalization for Growth

Continental is focusing on business areas with high growth potential, including making its UX business organizationally independent.

Continental unveiled its new strategy for enhanced value creation at the Capital Market Day held in Hanover, Germany. The company has set a goal to reach an adjusted EBIT margin of 8- to 11% in the next two to three years, with further improvements expected within this range. This plan includes a series of cost-reduction measures, Continental explained in its Capital Market Day presentation. The company also raised its sales forecast, aiming for €44 billion (approx. $48 billion) to €48 billion (approx. $52 billion) in the short term and €51 billion (approx. $56 billion) to €56 billion (approx. $61 billion) in the medium term.

The Tires group sector continues to focus on profitable growth, operational efficiency and adapting to market demands, the company said. Continental is leveraging megatrends such as sustainability, electric mobility and digitalization for growth in this sector.

Nikolai Setzer, CEO of Continental, emphasized the company’s commitment to evolving as a mobility and material technology group. “Our strategy aims to increase our value creation. This will allow us to continue to develop into the mobility and material technology group for safe, smart and sustainable solutions,” Setzer said. He highlighted Continental’s balanced and resilient portfolio and the team’s proactive and flexible management approach.

Katja Garcia Vila, CFO of Continental, reiterated the importance of reaching mid-term targets and emphasized a rigorous plan implementation to achieve expected adjusted EBIT margins. “Our vision is to create value for a better tomorrow,” Garcia Vila stated, also mentioning an updated dividend policy reflecting this goal.

In the Automotive group sector, Continental is focusing on business areas with high growth potential, including making the User Experience business area organizationally independent. This move is expected to enhance strategic options in displays and HMI controls. The sector plans to cut costs significantly, aiming to reduce R&D expenses to below 10% in the medium term.

In the ContiTech group sector, the emphasis will be on strengthening the industrial business, aiming to increase its sales share from about 55- to 80% the company said. The sector focuses on high-demand industrial fields and plans to make its Original Equipment Solutions business area fully independent by 2025, exploring various strategic options.

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